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In this appeal, Horvitz & Levy LLP obtained a successful result for a commercial tenant in a dispute over a long-term lease.

In 1963, Oliver Baker and his children leased 14 acres of property they owned to a developer, in order to facilitate the long-term commercial development of the property. The 99-year lease reserved to the Bakers the right to live on one acre of the leased parcel for as long as they desired. The Bakers lived on the one-acre parcel for the rest of their lives. After the last of the Bakers died in 2009, their successors, Michael and Victoria Lawrence, refused to vacate the one-acre parcel. The Lawrences sued JR Enterprises, the entity that held the right to occupy the property under the lease. The Lawrences alleged the lease provision requiring the Lawrences to deliver the one-acre parcel to JR was invalid and claimed that JR and its predecessors underpaid rent due under the lease. JR sued for damages caused by the Lawrences’ refusal to deliver the one-acre parcel.

The trial court found that the Lawrences breached the lease by failing to deliver the one-acre parcel to JR, and a jury awarded damages for the breach. The court also found that JR breached the lease by excluding certain categories of revenue from the 2008 rent payment and awarded damages for that breach. The court entered a net judgment in favor of JR.

The Lawrences appealed and JR retained Horvitz & Levy to defend against the Lawrence’s appeal. The Court of Appeal affirmed the judgment, holding, among other things, that Civil Code section 715, which provides, “[a] lease to commence at a time certain or upon the happening of a future event becomes invalid if its term does not actually commence in possession within 30 years after its execution,” did not apply retroactively to invalidate the lease provision requiring transfer of the one-acre parcel to the tenant. The Court of Appeal also found that the trial court properly applied Civil Code section 3275 to relieve the tenants of any forfeiture that might otherwise have occurred as a result of the tenants’ miscalculation of the amount of rent due under the terms of the lease.